1. THE BREAKING DOWN OR BUILDING UP OF
POTENTIAL BUYERS INTO GROUPS CALLED
MARKET SEGMENTS
What is Market Segmentation?

2. STP
It is the Research that determine how your organization divides its
customers into smaller groups based on age,income,personality
traits and behaviour
It Creates Subsets of Marketing based on Demographic
Needs,priorities,common interest,phychographic or
behavioural critirea that is used to understand demands of
targeted Audience
Marketing Segmentaion is the Process of identifying and
breaking up the total market into groups of potential
customers with similar motivations, needs or
characteristics, who are likely to exhibit homogeneous
purchase behaviour.

3. Benefits of
Market Segmentation
Identifies opportunities for new product development
Helps design marketing programs most effective for
reaching homogenous groups of buyers
Improves allocation of marketing resources

4. Bases for segmentation in
consumer markets
Geographic
Demographic
Psychographic
Behavioralistic

5. Geographical
Segmentation
Geographical Segmentation-It tries to divide customers according to different geographica;
boundaries or groups such as regions,size of area,population density,climate
Understanding Climate and geographical regions helps determine where to Sell,advertise as well as
expand business
Geographic segmentation tries to divide markets into different geographical units:
 Regions
 Size of the area
 Population density
 Climate

6. Geographic segmentation
 Regions: by continent, country, state or
even neighborhood
 Size of the area: segmented according
to size of population
 Population density: often classified as
urban, suburban, or rural

7. Demographic segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as:
• Age
• Gender
• Income
Gender: Gender segmentation is widely used in consumer
marketing.
The best examples include clothing, hairdressing, magazines
and toiletries and cosmetics.
• Social class
• Life style

8.  Age : Marketers design, package and promote products differently
to meet the wants of different age groups.
Good examples include the marketing of toothpaste (contrast the
branding of toothpaste for children and adults) and toys (with
many age-based segments).
Social class: Consumers "perceived" social class influences their
preferences for cars, clothes, home furnishings, leisure activities
and other products & services.
Income: Many companies target affluent consumers with luxury
goods and convenience services.
Good examples include Coutts bank; Moet & Chandon champagne
and Elegant Resorts - an up-market travel company.
Demographic segmentation

9. Psychographic segmentation
Psychographic segmentation groups customers according
to their lifestyle. Activities, interest, and opinions (AIO)
surveys are one tool for measuring lifestyle.
 Activities
 Interest
 Opinion
 Values

10. Behavioralistic segmentation
Behavioralistic segmentation is based on actual customer
behavior towards products. Some behavioralistic variable
include:
 Opinions, interests and hobbies
 Degree of loyalty
 Occasions
 Benefits sought
 Usage

11.  Degree of loyalty – customers who buy one
brand either all or most of the time are valuable
to firms.
 Occasions – this segments on the basis of when
a product is purchased or consumed.
 Opinions, interests and hobbies – this covers a
huge area and includes consumers’ political
opinions, views on the environment, sporting
and recreational activities and arts and cultural
issues.
Behavioralistic segmentation

12. Target Marketing
• Target Market
– Consists of a set of buyers who share common
needs or characteristics that the company
decides to serve.
– The process of evaluating segments and
focusing marketing efforts on a country, region,
or group of people that has significant potential
to respond

13. Criteria for Targeting: 9 W’s
• Who buys our product?
• Who does not buy it?
• What need or function does it serve?
• What are customers buying to satisfy the
need
for which our product is targeted?
• What price are they paying?
• When is the product purchased?
• Where is it purchased?
• Why is it purchased?

14. • Selecting Target Market Segments
– Undifferentiated (mass) marketing
(A company’s attempt to appeal to the whole market with a single
basic marketing strategy intended to have a mass appeal.)
(e.g., gasoline, soft drinks, white bread), the undifferentiated
market approach makes the most sense.
Differentiated (segmented) marketing
– (a company’s attempt to appeal to two or more well defined market
segments with a marketing strategy tailored to each segment)

15. Concentrated (niche) marketing
– (a company’s attempt to appeal to one well defined market segment
with one tailor made marketing strategy.)
For example, selling auto parts only to auto manufacturers is a concentrated
marketing strategy.
– Micromarketing (local or individual)-Offering
products or services that meet unique needs of
individuals.
Examples are Relationships,Job Title,
Industry,Size

16. Positionin
g
is the
act
the
o
f
designin
gcompany’s
offering and image to
occupy a distinctive
place in the target
market’s mind.
Market positioning-refers to the consumer's
perception of a brand or product in relation to
competing brands or products.Market
positioning refers to the process of establishing
the image or identity of a brand or product so
that consumers perceive it in a certain way.

17. Developing and communicating a
positioning strategy
• Superior : The difference is superior to
other
ways of obtaining the benefit.
• Preemptive : The difference cannot be
easily copied by competitors.
• Affordable : The buyer can afford to pay for
the difference.
• Profitable : The company will find it
profitable to introduce the difference.

18. Steps to Choosing and Implementing
a Positioning Strategy
• Step 1. Identifying a set of possible
competitive advantages: Competitive
Differentiation.
• Step 2. Selecting the right competitive
advantage.
• Step 3. Effectively communicating and
delivering the chosen position to the market.

19. EXAMPLES

20. Some examples

21. PPT ON STP
BY JASJEET SINGH
PGDM 3SEM
MOS (MARKETING OF SERVICES)